Delegates from the Organization of the Petroleum Exporting
Countries and external experts are meeting at OPEC's Vienna
headquarters this week to discuss the producer group's long-term
strategy. Such meetings do not set output policy.

The talks arise as data from the United States showed a
record drop in drilling rigs, prompting oil prices to jump above
$50 a barrel on Friday as traders said they saw it as a sign
that OPEC's strategy was taking a toll on the U.S. shale boom.

"The low prices are affecting the investment of some
companies in shale oil. This should affect the supplies in the
longer term," a delegate from a Gulf OPEC producer said.

"Prices are stabilising around $40 to $45, but the world
economy is not very strong and stocks are too high."

Two other OPEC delegates, one of whom is from a Gulf
producer, said they could not rule out prices dropping to as low
as $30-$35 due to weak demand combined with global refinery
maintenance in the first and second quarters of 2015.

"Prices are supported now by winter and stockpiling," one of
the delegates said.

Another Gulf delegate said: "The general feeling is that
prices will still remain lower than what we all want because of
the excess of supply in the market. The expectation is that
these stocks will not decrease before the first half of the
year."

"There are a number of good signs, for example the shutdown
of some production in the U.S. and Canada. So it means that the
policy decision made in the last meeting was the correct one,
it'll be slow, painful for some more than others but in the end
effective," that delegate said.

OPEC last November decided against cutting its production
despite misgivings from its non-Gulf members, after Saudi Oil
Minister Ali al-Naimi said the group needed to defend market
share against U.S. shale oil and other competing sources.

The decision sent oil prices to what was a four-year low
close to $71 a barrel. Crude later fell to a near six-year low
of $45.19 on Jan. 13 - further than many delegates had expected
- and was trading above $53 on Monday.

Publicly, OPEC officials including Secretary-General
Abdullah al-Badri have started to express confidence that a
bottoming out of prices and a recovery may be under way.

The talks on OPEC's long-term strategy - which is updated
every five years - continue on Tuesday. OPEC oil ministers, who
decide the group's output policy, are not scheduled to meet
until June 5.
(Reporting by Rania El Gamal, Alex Lawler and Amena Bakr;
Editing by Dale Hudson)